European Perspectives on Philanthropy René Bekkers VU University Amsterdam The Netherlands June 29,...

European Perspectives

on Philanthropy

René BekkersVU University Amsterdam

The Netherlands

June 29, 2015

Understanding Philanthropy Conference

University of Kent

June 29, 2015Understanding Philanthropy

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Wall Street is an early example

of Dutch Philanthropy.


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Stuyvesant called upon the 43 richest residents of New Amsterdam to provide funding to fix up the ailing Fort Amsterdam and to construct a stockade across the island to prevent attacks from the north, while it took New Amsterdam's most oppressed inhabitants -- slave labor from the Dutch West India Company -- to actually build the wall.

Russell Shorto – The Island at the Center of the World


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This is the ‘Giving house’ in the city of ‘s-Hertogenbosch. In the middle ages, the poor in the city received food and clothing at this house. Funds for the service were obtained through bequests, legacies and other donations from citizens, but also from the city council. Today, the building serves as the city’s library and an arts center.


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The ‘Sweet Mary’ Fraternity was founded in 1318. Its first members were clergy. The fraternity engaged in charity and cultural activities. Ghisbertus van der Poorten donated his house in 1483. The acceptance of Protestants, including members of the Royal House of Orange, helped resolve religious conflicts that had dominated the city since the Spanish occupation in the 17th century. The current building in neogothic style dates back to 1846.


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The ‘Sweet Mary’ Fraternity was founded in 1318. Its first members were clergy. The fraternity engaged in charity and cultural activities. Ghisbertus van der Poorten donated his house in 1483. The acceptance of Protestants, including members of the Royal House of Orange, helped resolve religious conflicts that had dominated the city since the Spanish occupation in the 17th century. The current building in neogothic style dates back to 1846.

Amsterdam Concert Hall


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Amsterdam Concert Hall


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The Rijksmuseum (1885)


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1880: VU University founded


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Willem Hovy (1840-1915), owner of brewery The Crowned Falcon, donated 25.000 guilders for the foundation of the ‘Vrije Universiteit’.


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This is all history.

We have ‘lost’ the philanthropic tradition.

Since World War II, state subsidies dominate funding for nonprofit

organizations. Philanthropy is in our culture – but

institutions have discouraged it.

The Societal Significance of Philanthropy

1. The societal destination of philanthropyHow much time and money do citizens in Europe contribute to which causes?

2. Social originsWho gives what and why?

3. The societal impact of philanthropyWhat does philanthropy achieve?

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If only we knew…

1. How much time and money?We do not know.

2. How many people give and volunteer?It depends on the data; ‘methodology is destiny’.

3. What does philanthropy achieve?We do not know - it depends on many societal conditions.


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Data from the Gallup World Poll. Map available at http://www.targetmap.com/viewer.aspx?reportId=42492

Research Questions for ‘Giving Europe’

Which is the most generous country in Europe and why?

1. How large are differences in philanthropy (incidence, amounts, causes supported) between nations in Europe?

2. How can these differences be explained?

June 29, 2015 Understanding Philanthropy Conference

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Giving Prevalence in Europe

GRHU PT ES FR CZ IT PL BE FI DE AT SE LU DK IE NL GB0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

European Social Survey EurobarometerGallup World Poll


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Why may countries differ?

A. Because of population composition differences: some countries are populated with more generous citizens. (Who gives?)

B. Because of country differences: some countries make citizens living there more generous.

(When do people give?)


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‘Theories’: clusters of variables

• Political: ‘Worlds of Welfare Capitalism’, democracy, civic engagement, inequality

• Economic: ‘Crowding-out’, price of giving, wealth

• Cultural: religious traditions, social norms• Legal: freedom for nonprofit organizations• Psychological: trust, guilt, perceived need• Communication: news consumption• Biological: DNA, signalling, nutrition• Thermoclimatic: adversity in weather


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‘Theories’: clusters of variables

• Economic: ‘Crowding-out’, price of giving, the wealth of nations

• Political: ‘Worlds of Welfare Capitalism’, democracy, civic engagement, inequality

• Cultural: religious traditions, social norms• Legal: freedom for nonprofit organizations• Psychological: trust, guilt, perceived need• Communication: news consumption• Biological: DNA, signalling, nutrition• Thermoclimatic: adversity in weather


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Mechanisms driving philanthropy

1. Awareness of need2. Being asked to give3. Costs and benefits 4. Altruism: how much others are giving5. Reputation: social pressure and rewards6. Psychological costs and rewards7. Values8. Efficacy


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Why do people give?

People give more (often) when1. There is a clear need need2. They are being asked solicitation3. Costs are lower, and benefits are higher

costs/benefits4. They care about the recipients altruism5. They receive social benefits reputation6. They receive psychological benefits self-

rewards7. The cause matches their values values8. Donations are perceived to be efficient efficacySource: Bekkers, R. & Wiepking, P. (2011). ‘A Literature Review of Empirical

Studies of Philanthropy: Eight Mechanisms that Drive Charitable Giving’. Nonprofit and Voluntary Sector Quarterly, 40(5): 924-973. Available at www.understandingphilanthropy.com


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http://www.understandingphilanthropy.com/

Not today

• How much are monozygotic twins alike with respect to their giving?

• Why do people prefer charities with names similar to their own names?

• Why do men and women give differently?• How is political affiliation related to

giving?• How much altruism is there in individual

giving decisions?


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Mechanisms driving philanthropy

1. Awareness of need2. Being asked to give3. Costs and benefits 4. Altruism: how much others are

giving5. Reputation: social pressure and rewards6. Psychological costs and rewards7. Values8. Efficacy


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The ‘Crowding-out Effect’

• Occurs when a decrease in government funding leads to an increase in philanthropic funding for a cause.

• Or vice versa, when an increase in philanthropy reduces government funding.


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The Big Society / Participation State


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The ‘Waterbed Effect’

Government grants

Private donations

The metaphor assumes the water mass is constant & contained, as if

philanthropy and government funding are a ‘zero-sum game’.


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Friedman (1962) called this the crowding-out

effect.

Questioning the metaphor

• The metaphor is not born out of research.

• For a researcher, it is a testable hypothesis.

• Empirical tests may as well reveal the reverse effect of ‘crowding-in’: when an increase in government funding increases philanthropic activity.

• The research question is: when and where occurs how much crowding-out?


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A meta-analysis


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Crowding-inCrowding-out De Wit, A. & Bekkers, R. (2014). Government support and charitable donations: A meta-analysis of

the crowding-out hypothesis. Paper presented at the 43d ARNOVA Conference, Denver, November 20-22, 2014.

UK

stu

die

s

‘A severe cut in government funding to nonprofit organisations is not likely, on average, to be made up by donations from private donors.’

Abigail Payne (1998)

Across all the published studies, a $1 increase in government support is associated with a $0.18 decrease in private charitable donations on average.


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Contingencies

US-based studies tend to find more crowding-out than studies from elsewhere, including Europe.

Experiments in controlled environments (mostly with students) find more crowding-out than studies analyzing archival data from nonprofit organizations.June 29, 2015


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The ‘crowding-out effect’ varies

Between

• World regions and societies (macro-level)

• Organizations (meso-level)• Citizens (micro-level)

• These three levels, and over time.


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It’s not as simple as rocket science


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Data from the Gallup World Poll show that citizens in countries in which the tax burden is higher are more likely to give to charity, suggesting a crowding-in effect


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N = 111, r = .011

Outside Europe, there is no relationship between tax burden and the prevalence of giving


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EU investments in innovation

• In the European Foundations for Research and Innovation (EUFORI) Study, a consortium of 34 national experts documented ~12,000 foundations supporting R&I in Europe.

• In which countries are foundations most active?

• How do foundations view their relationship with government?


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N = 28r = - .176 Remarkably similar to the average ‘crowding-out

effect’

Country characteristics


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N = 27r = 0.567

Countries above the diagonal rank higher in corporate investments than in foundation spending on R&I

The UK is one of the countries that rank higher in foundation than corporate spending on R&I

A strongly positive relation

Scandinavia wins (again)

Flexibility is the rule

• The ‘crowding-out’ effect is flexible, open to modification – and may even become a crowding-in effect.

• Governments, nonprofit organizations, philanthropists and the public at large can influence it.


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Source: Gouwenberg et al., (2015). EUFORI Study

Four models of collaboration

• Competitive: try to do better than government or make government do better

• Initiating: start a program, and export it into government policy

• Substituting: take over government tasks

• Complementary: work towards similar goals and strengthen each other as partners 47June 29, 2015



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Source: Gouwenberg et al., (2015). EUFORI Study

Recreating a ‘Giving Culture’

• Overcome the modesty: “Do not let your left hand know what your right hand is doing” (Matthew 6:3).

• Develop new forms of philanthropy, mixed with business.

• Education could play a role in creating a giving culture, e.g. through service learning.


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The stubborn 2% in the UK: giving as a % of GDP doesn’t change muchSource: Perry (2013), https://philanthropy.com/article/The-Stubborn-2-Giving-Rate/154691

https://philanthropy.com/article/The-Stubborn-2-Giving-Rate/154691

https://philanthropy.com/article/The-Stubborn-2-Giving-Rate/154691


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The expanding pie in the UK: giving as a % of expenditure increasedSource: Cowley, McKenzie, Pharoah & Smith (2011)


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The changing pie in the Netherlands: giving as a % of expenditureSources: Schuyt, Gouwenberg & Bekkers, Giving in the Netherlands, https://renebekkers.files.wordpress.com/2015/06/15_06_29_economic_trends_philanthropy.xlsx

https://renebekkers.files.wordpress.com/2015/06/15_06_29_economic_trends_philanthropy.xlsx



Popular concerns• Under- or loss of coverage: the general

level of service provision may suffer when the government retreats.

• Inequality: philanthropy may fund specific causes, but not others; Matthew-effects will help those causes with an early advantage.

• ‘Too much’ influence on public policy for philanthropists leading to arbitrariness, nepotism and inequality.


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Giving USA

31

16

12

11

7

10

54 3 1 religion

education

human services

foundations

public-society benefit

health

arts, culture, human-ities

international

environment/animals

unallocated


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Total giving, 2013: $335 billion (2.0% GDP; tax burden: 25%)

Giving in the Netherlands

22

5

13

126

13

8

7

13religion

education

[human services]

[foundations]

public-society benefit and human services

health

arts, culture, humanities

international

environment/animals

unallocated

sports and recreation


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Total giving, 2013: €4.4 billion (0.8% GDP; tax burden: 38%)

What we need is…

• A serious political discussion about the role of philanthropy in public policy.

• Decent research informing policy decisions, paying attention to undesirable side-effects.

• An Impact Philanthropy Lab (IPL): creation and evaluation of new philanthropic / business investment instruments.

• Knowledge about what works in fundraising, and about failures.


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Published

Unpublished?

These did not work.

• Picture recipients on fundraising letters (-€40k).

• Calling alumni by current fraternity members.

• Reminding people of an event that made them feel grateful.

• Reminding people of an event that made them feel happy.

• Giving people more positive social information.

• Giving students the names of charity ambassadors.


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Published - Unpublished

• Picture recipients on fundraising letters (-€40k).

• Calling alumni by current fraternity members.

• Reminding people of an event that made them feel grateful.

• Reminding people of an event that made them feel happy.

• Giving people more positive social information.

• Giving students the names of charity ambassadors.


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These did not work either.

• Reducing the anonymity of donations. • Giving the option of forfeiting anonymity.• Switching the default from ‘giving’ to

‘keeping’.• Telling people they are a helpful person.• Telling people the government lowered its

subsidy, increasing the need for donations.

• Showing students stylized eyespots.


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But real watching eyes….

base0%

10%20%30%40%50%60%70%80%90%

100%

7460 61

19

24 18

717 18

donated 0 donated 5 donated 10

% d

onati

ng


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June 29, 2015 62

Suggesting a €35 contribution

<10 10 15 20 25 30 35 40 45 50 >500

20

40

60

80

100

120

no reference

Fre

quency


Framing the incentive as a match

control group 50% rebate: price = 0,50

100% match: price = 0,50

0%

5%

10%

15%

20%

25%

30%

35%

Proportion of the reward for participation in GINPS04 donated by participants

+46%

+90%


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And finally.

Good food….And a drink.


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From my Blog, https://renebekkers.wordpress.com/2014/12/17/the-fishy-business-of-philanthropy/

https://renebekkers.wordpress.com/2014/12/17/the-fishy-business-of-philanthropy/




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0 10 20 30 40 50 60 70 800

10

20

30

40

50

60

70

80

Series1

f(x) = 0.297965192702035 x + 27.3793574846206R² = 0.0887832560619607

Rank of country per capita fish consumption in kg

Ran

k o

f pro

port

ion

of

popu

lati

on

en

gagin

g i

n

ch

ari

ty

r = 0,298

Sources: http://www.helgilibrary.com/indicators/index/fish-consumption-per-capita and http://www.theguardian.com/news/datablog/2010/sep/08/charitable-giving-country#data

NOTE: a higher rank is closer to the origin but means more fish and more giving

Grams of food required to yield an additional €1 donation


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spinach chicken salmon eggs chocolate milk0

200

400

600

800

1000

1200

1400

1600

1800

2000

References• Bekkers, R. (2015). The Analysis of Regional Differences in Philanthropy: Evidence

from the European Social Survey, the Eurobarometer and the Giving in the Netherlands Panel Survey. Paper presented at the 5th ESS Workshop, The Hague, May 22, 2015. https://renebekkers.files.wordpress.com/2011/10/15_05_22_ess_regional_differences.pdf

• Bekkers, R. (2015). ‘Regional Differences in Philanthropy’. In: Routledge Companion to Philanthropy, edited by J. Harrow, T. Jung & S. Phillips. Routledge.

• Bekkers, R. (2015). When and Why Matches are More Effective Subsidies Than Rebates. Research in Experimental Economics, Volume 18: Replication in Economic Experiments. Edited by Deck, C. Fatas, E., & Rosenblat, T. Emerald Group Publishing.

• Gouwenberg, B., Karamat Ali, D., Hoolwerf, B., Bekkers, R., Schuyt, T. & Smit, J. (2015). Synthesis Report EUFORI Study: European Foundations for Research and Innovation. Luxembourg: Publications Office of the European Union.

• Bekkers, R. (2014). The Fishy Business of Philanthropy. December 17, 2014. https://renebekkers.wordpress.com/2014/12/17/the-fishy-business-of-philanthropy/

• Bekkers, R. & Wiepking, P. (2011). ‘A Literature Review of Empirical Studies of Philanthropy: Eight Mechanisms that Drive Charitable Giving’. Nonprofit and Voluntary Sector Quarterly, 40(5): 924‐973. http://understandingphilanthropy.com


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https://renebekkers.files.wordpress.com/2011/10/15_05_22_ess_regional_differences.pdf

https://renebekkers.files.wordpress.com/2011/10/15_05_22_ess_regional_differences.pdf


http://understandingphilanthropy.com/

Thanks, saysRené Bekkers

Professor & DirectorCenter for Philanthropic

StudiesVU University Amsterdam

[email protected]: @renebekkers

Blog: renebekkers.wordpress.com


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mailto:[email protected]

https://twitter.com/renebekkers

https://twitter.com/renebekkers

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